Donald Trump is the current favorite to win the Republican nomination for president, and Wall Street doesn’t appear to be happy about it.
Trump is continuing to lead the Republican polls, only facing real competition from former neurosurgeon Ben Carson. Meanwhile, investors on Wall Street are becoming increasingly worried that the billionaire will actually be able to pull off a win. What was once viewed by many as a laughable pipe dream, has developed into a legitimately possible reality.
Wall Street statesman Byron Wien said, “I held four lunches for investors in August, and at the first one everyone assumed Trump would implode. By the fourth one everyone was taking him very seriously. He taps into frustrations that are very real and he is a master manipulator of the media.”
Many people in the financial industry believe that something will eventually knock Trump off, and voters will flock toward a more establishment candidate. However, that belief is losing ground, as followers of the election are unable to say what exactly could put a dent into Trump’s appeal to voters. The situation is becoming more of a reality with each passing day.
The CEO of a large company who refused to be identified said, "I don't know anyone who is a Donald Trump supporter. I don’t know anyone who knows anyone who is a Donald Trump supporter. They are like this huge mystery group. So it's a combination of shock and bewilderment. No one really knows why this is happening. But my own belief is that the laws of gravity will apply and those who are prepared to run the marathon will benefit when Trump drops out at mile 22. Right now people think Trump is pretty hilarious but the longer it goes on the more frightening it gets."
Wall Street experienced a scare on Sunday, as Trump participated in Face the Nation on CBS. On the show, the presidential candidate claimed that the executive pay of America is “a complete joke”, and he promised to increase taxes on hedge fund managers.
Trump’s comments about Wall Street paled in comparison to his rant concerning illegal immigrants. Trump says that he will deport 11 million undocumented immigrants in the timespan of two years. He also has plans to build a giant wall to border Mexico.
The presidential candidate also made headlines for bashing the looks of former Hewlett-Packard CEO Carly Fiorina. Trump said they make her unelectable.
Meanwhile, financial executives on Wall Street are becoming increasingly concerned with Trump’s lasting power, as he currently sits at over 30% in the polls. Despite these concerns, there is not yet an organized effort by Wall Street to stop Trump.
One possible reason that executives on Wall Street are afraid to attack Trump is that they are afraid that doing so will only increase his numbers in the polls. Big banks are still often viewed as unfavorable in America following the financial crisis from a few years ago.
However, Trump does have some support from Wall Street.
The Republican candidate has praised Carl Icahn on multiple occasions. Trump has stated that he would offer the billionaire investor the opportunity to be his first Treasury secretary. Icahn has stated on Twitter that he would accept the post.
Wall Street is also frustrated by Hilary Clinton’s decline in the polls. Meanwhile, Senator Bernie Sanders of Vermont is rapidly gaining ground. Sanders is a self-described socialist and critic of Wall Street.
The typical view from Wall Street early in the election cycle was that Jeb Bush would win, and even if he didn’t, another favorable candidate such as Clinton would instead. However, this is looking increasingly unrealistic as more time has passed.
While Bush and Clinton have promised tax increases on wealthy investors, they are both friendly toward large establishments Furthermore, they both offer policies on trade, immigration, and other issues that are congruent with typical Wall Street opinion.
One Wall Street Democrat said, “Neither of them (Clinton and Bush) are doing very well right now. Both Trump and Sanders have done a pretty great job tapping into this sense of frustration not just with Wall Street, but with all of the establishments.”